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Mistake 3: Not having a definite exit plan prior to expiration

You've heard it a million times before. In trading options, just like stocks, it's critical to control your emotions. This doesn't mean swallowing your every fear in a super-human way. It's much simpler than that: have a plan to work, and work your plan.

Planning your exit isn't just about minimizing loss on the downside. You should have an exit plan, period - even when things are going your way. You need to choose in advance your upside exit point and your downside exit point, as well as your timeframes for each exit.